July inflation seen accelerating to 4.9%

MANILA, Philippines - The Bangko Sentral ng Pilipinas sees the July inflation accelerating to as high as 4.9 percent  due to the increase in the prices of rice and electricity.

“The rate is projected to setttle within 4.1 percent and 4.9 percent. The BSP’s forecast incorporates the potential impact of higher prices of rice and electricity,”  BSP Governor Amando M. Tetangco  Jr. said.  

“At the same time, the reported decline in the prices of some agricultural products and reduction in petrol prices could somewhat partly offset the upside pressures,” he said.

Inflation   eased to 4.4 percent in June as the decline in  the prices of   alcoholic beverages, housing, and utilities tempered the unabated increase in food prices.

Inflation stood at an average rate of 4.2 percent during the first six months of the year, above the BSP’s three to five percent target for this year.

 “Going forward, the BSP will continue to closely monitor price trends and their implications for future inflation,” Tetangco said.

 “The BSP stands ready to implement policies to keep inflation expectations well-anchored and protect the government’s inflation targets,” he said.

Key policy rates have been kept steady since the start of the year as inflation expectations remain within the central bank’s target.

The BSP, however, has raised the reserve requirement ratio by 200 basis points and the special deposit account rate by 25 basis points to 2.25 percent in order to bring down the relatively high liquidity growth.